Daily Stock Market Report (Wed 28 May 2025) - FDEV, PETS, KGF, AVG, SCT, RTO, CCR, THX

Wed 6:02am by Graham Neary

36 comments 4712 reads

Good morning!

I've noticed many comments in recent days, both here and elsewhere, along the lines of "Stock XYZ is up 10% recently, does anyone know why?"

What this says to me is that we've been in a depressing bear market in small-caps for far too long, and investors have forgotten that shares can go up sometimes!

Stocks are still being taken off the market, and are not being replaced by fresh IPOs, because foreign markets and private markets are willing to give higher valuations to businesses than investors on the LSE.

And the only way this is going to change is if we get a lot more of these unexplained increases in share prices. Long may it continue!

The Agenda is complete.

Spreadsheet accompanying this report: link.

13:50: wrapping this up for today, thanks!

Companies Reporting

Name (Mkt Cap)	RNS	Summary	Our view (Author)
Rentokil Initial (LON:RTO) (£8.9bn)	Sale of France Workwear	Sold for €410m, exp cash proceeds c.€370m. Now focused on Pest and Hygiene & Wellbeing.	AMBER (Roland) [no section below] This disposal looks sensible to me and was something I had half expected to see. However, it doesn't seem likely to have much impact on the difficult turnaround that’s underway following Rentokil’s ambitious (unwise?) $6.7bn acquisition of US rival Terminix in 2022. This deal left the group with elevated debt levels and an enlarged share count. Unfortunately, combining Terminix with Rentokil’s US business has proved more difficult than expected. However, I see that the CEO who oversaw the deal is now retiring and I think the worst of the problems may now have passed. I think there could be an opportunity here, but at this time and price I share the StockRanks’ position that a neutral view makes most sense.
Kingfisher (LON:KGF) (£5.3bn)	Q1 Trading Update	Full year guidance reiterated for adj PBT of £480-540m. Q1 LFL sales +1.8%, further share gains.	GREEN (Roland) Strong Q1 sales in the UK were offset by weaker performance in France and may have received a boost from the spring weather. But my view is that Kingfisher is doing the right things and is positioned to deliver improved profitability when external conditions improve. The valuation looks reasonable to me and I’m comfortable taking a positive view, reflecting the StockRank of 99.
Softcat (LON:SCT) (£3.6bn)	Q3 Trading Update	SP +2% Strong…

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cshfool

Wed 8:27am

Nice event, but it's in the very far south. ;-)

PitBullCH

Wed 8:39am

Thanks - general trend upwards is obviously re-assuring, though over nearly 20 years it’s not exactly stellar.

Epitychia

Wed 8:45am

Gold up 763% in last twenty years. SP 500 up 709% last twenty years. Gold has beaten virtually everything except Bitcoin.

Wed 8:49am

Crypto, startups, property - of course all had bumps along the way, first two are very much high risk and 95%+ risk of failure.

But have to say, perhaps I’ll look to park some limted funds into one of the better Gold-related ETFs - preferably one that actually holds the stuff.

Silver Moon

Wed 8:50am

It's a multi-bagger at 10X, must have kept up with inflation if nothing else ;-)

Dave R

Wed 8:51am

If anyone thinks gold is a complete safe haven then they're probably irrational, but I don't think many think that. If you think gold can be uncorrelated with equities during certain points in the economic cycle then it may make more sense.

Yes USDGBP can impact profit but it works both ways and it's impact isn't restricted to gold. I've never heard anyone suggest not investing in American equities due to currency risk

As to if gold will continue to rise , I haven't a clue but have a considerable % of my portfolio in physical gold, royalty financing (WPM) and a small miner (AAZ). Last two are really geared plays on the price of gold. I did it as a hedge against the many things floating around that could upset the stock markets.

ChrisW

Wed 9:00am

WHAT! It's North of the River!!!!

An expedition.......

Albertos

Wed 9:02am

I'm in the camp that believes the recent gold run will continue or at least plateau at around the current level.

Most, if not all, of the Wall Street giant have raised their forecasts for Y/E gold to above the current levels of $3,300 mainly based on central bank buying following the new Basel agreement and, indeed, its safe haven status in uncertain times. (Just because you think its irrational, doesn't mean its not real.)

I dabble occasionally in Golden Prospect Precious Metals (LON:GPM) although not at the moment. The managers there are positioning in PM miners with near-term additional production coming on-line which seems a sensible way of playing this and covers at least some of the risks which come with mining.

I'm currently in Anglo Asian Mining (LON:AAZ) following this logic, with the new Gilar mine increasing production over and above what they could have done this year after a disastrous 2024 when production had to be curtailed due to an environmental issue with its tailings dam (yes there are indeed risks). The second half of this year will see Demirli come into production (AAZ have not included anything for this in their current year guidance as yet) which they got for free following the Azerbi / Armenia peace (some risks are to the upside). For completeness I also hold Serabi Gold (LON:SRB) who have guided increased production - not so sure here but I have my fingers crossed.

I reserve the right to be totally wrong.

Robert W

Wed 9:13am

I agree - shares have been drifting down for 6 months now - though not on any obvious volume - while the newsflow has been almost universally positive so it would be easy to speculate that someone knows something we don't. I continue to hold on the basis that I can't find anything in the accounts to worry about and therefore to me at least the shares look really good value.

I just hope the auditors have done their jobs properly....

Harry Hindsight

Wed 9:25am

The Royal Mint Physical Gold ETC Securities (LON:RMAP) Seems ok if want to keep LSE base.

fred9566

Wed 9:36am

couldn't agree more - the Derby event was much more central and accessible

Richard P

Wed 9:45am

That is interesting. I also just checked and the 709% includes S&P500 dividends...

Lord Gnome

Wed 10:07am

Agree. I enjoyed Derby. I would guess, however, that many of the speakers and presenting companies find London more convenient.

Wed 10:24am

Diversifying across all of the small miners that are actually selling the product is my plan, regretably I stood and watched Thor Explorations (LON:THX) surpassing everything else and did nowt about it. One can still fiddle with the portfolio, I did sell AAZ but added to SRB and PAF with the funds. Pan African Resources (LON:PAF) and Caledonia Mining (LON:CMCL) will pay me a dividend which is reassuring.

SheriffJEB

Wed 10:27am

As a recent buyer of Spectra Systems (LON:SPSY), I was spooked by this announcement so thank you for drawing attention to it here last night and again this morning. As you say, the "separation" from the departing CFO does not seem to have been announced previously - perhaps it has only just occurred. It got me Googling and it appears the CFO was also replaced in 2016, 2022 and 2023. Five CFOs in less than ten years is a red flag, as is the CFO not being on the board (keeping him away from investors? hiding his remuneration which may be excessive to "buy" flexible judgment?). It suggests an overly dominant CEO determined to report his preferred figures. I note that the chairman is 87 and has been in post since the IPO in 2011. Although the preliminary announcement on 31 March describes the figures as audited, the statutory accounts are not yet out: the notes to the prelims say that they are expected in April - it's now nearly the end of May. Finally, last night's announcement mentions twice the new CFO's experience in revenue recognition. It suggests to me that there are disagreements with the auditors over the accounts which the outgoing CFO failed to resolve to the satisfaction of the CEO and that some restatements may be on the way unless the new CFO can do better.

Good luck to all holders but I've decided to sell today at a small loss.

jonno

Wed 10:48am

Absolutely Sparkler. No hubris. As you say one is never too far from a profits warning.

Camtab

Wed 4:04pm

It is worth noting that in 1933 the US banned individuals from holding physical gold with a maximum sentence of 10 years in the slammer for disobeying the order. On paying holders in USD they then devalued the dollar. Gold safe??............

carmensfella

Wed 10:51pm

Yes it is a balancing act as lots of the speakers are based near London and most companies have other business they can do in the City so not a problem combining those and fitting Mello into their diary. We found it much more difficult to convince them to go to Derby to do a couple of presentations.

You can see from our two day programme how full it is and to be fair that benefits investors if so many more companies to see. The team really enjoyed doing the event in Derby though and we are planning a one day show in Manchester in late September so stay tuned

intuitive6191

Wed 11:19pm

As a long term passive investment, Gold has a much better record than many suspect. A further benefit is that Gold coins that are British legal tender are CGT free.

BnB

Thu 6:49am

Manchester sounds good!

Daily Stock Market Report (Wed 28 May 2025) - FDEV, PETS, KGF, AVG, SCT, RTO, CCR, THX

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Graham Neary

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